Bitcoin Forum

With all the hacks and manipulation going on are exchanges even a good idea?

It isn't panning out all that well for Wall Street.

Why is Bitcoin any different?

BTC isn't any different... people are, in general, "greedy"... and somewhat illogical... we seem to think that we can make value out of nothing... much like Wall St, it is all just shifting numbers around... and is all smoke and mirrors.

Most altcoins exist purely to pump and dump and make BTC. Most exchanges just become big enough to either become too tempting a target for the owners to scam and run or for hackers to attack. Online or in real life, whenever there is a chance to make serious $$$, there will be crime/scams etc...

An exchange brings people together. I buy, you sell. It is possible without exchange, but less easy. Exchange takes a small share in exchange for comfort.
If you just pay Bitcoin and get paid in bitcoin, you do not need any exchange.

Bitcoin exchanges makes it easier and more efficient for those who want to trade.

As far as your poll, I imagine bitcoin would survive even without exchanges. It would just make trading less convenient for those that do lots of trading if there were no exchanges.

Apart from selling them (which is still an exchange) then there's no way of increasing the value of Bitcoin.
There are always vulnerabilities in systems. Only exchanges with valid insurance should be trusted, as others would be more vulnerable to you losing your coins. Exchanges are what makes bitcoin valuable, if we were without them, the bitcoin price would dramatically fall and cause instability in the bitcoin network and could even end the circulation of Bitcoin or its use in the modern society.

Easier said than done. Do you know of an exchange with valid insurance? I wouldn't even know where to begin searching for such an exchange.

Like anything else, it depends on the risk/reward. I don't think Wall Street has really dipped their toes in. At this stage, security firms are still in the "I don't know what I'm doing phase" (see: BitGo), and regulation is still a big grey area, so no major investment firms are going to back bitcoin exchanges. At some point, we will grow up from this -- both in terms of centralized exchange security and trustworthy management, and decentralized exchanges, who won't be able to compete with the liquidity of centralized exchanges.

I know Coinbase say they insure about their assets. I'm not sure if the documentation for this is publically avaliable by them though or if this is an accurate claim.
Insurance in a lot of places such as these type are hard to get anyway (most places don't trust digital vulnerabilities that the site can be under. There are also smaler sites that may get insurance for having smaller funds, though you should never keep your coins on these exchanges, they should just remain there for a shor period of time and move from that account to a more secure one (such as a desktop wallet).

Even though some of these exchanges have been fraudulent, I think we need them right now for bitcoin to survive. In the long run, maybe there is a better solution, but I think that so many people rely on the exchanges for trading, that they are needed.

Yeah right only exchanger can decide what will be the price of the currency.. thats why we are experience of hacking because i think they are monitored by hackers that it takes a long time recording of cookies or the ip of the site is the biggest problem that this is new tools of hackers that i saw before from a deepweb forum..  they are using this tool to monitor a site if someone login there they can get the cookies and they will use a third party to convert the cookies into a password..

I don't think they do. USD may be held in insured accounts, but not BTC. I'm pretty sure I saw a Medium article recently from Fred or Brian in which he stated that insurance was prohibitively expensive, and that they preferred to expend those resources on improving their security infrastructure.

That sounds all well and good, but it is a bit scary to consider how much cold storage they have. I wonder what they would do in the case of a major hack.

If they have a lot of cold storage (which ist sounds like they do). Then that's probably not very secure compared to the value. Unless they have printed paper wallets stored in a large concrete safe, surrounded by armered guards and vehicles, hidden in a bunker, I don't think it's very safe!
Once there's a major hack or breach of their pysical security, then there's a massive problem for coinbase (they would actually be a very profitable hack as they store millions of dollars worth of Bitcoin there).

Thats right, Bitcoin is still far away from this ideal scenario though. Very few people earning Bitcoin now, thats why most people need some form of exchange to get Bitcoins. Maybe in the future exchanges wont be so important, but now they are essential for people to get Bitcoins. Would it be better if the exchanges were decentralized and trustless? Yes, but there is no good enought working alternative. Look at localbitcoins, the spread between buy-sell prices is too big, and very illiquid market with just few buy-sell orders available.

According to their recent AMA, they have upwards of $700 million worth of BTC in cold storage. Scary as hell, if you think about it:

https://www.reddit.com/r/Bitcoin/comments/4wx23q/coinbase_security_team_ama_10am_pdt_today_here/d6arx2x

So indeed, no insurance on that amount of bitcoin. I would concede that insurance would indeed be expensive, but one has to wonder how secure their vault really is. My biggest concern with bitcoin businesses is always inside jobs, and cold storage can't protect from that. I just hope they have multiple strong levels of security / multi-key access to that cold storage. That's a lot of money on the line.

There are probably more pople/businesses in Bitcoin than were previously in it. The price has dramatically increased and continues to do so.


A scary and slightly enticing amount to have stored somewhere offline.
That's a lot of money stored there in Bitcoin, let's hope for sure that they're using very good security measures, otherwise, the majority of everyone's money is gone.

I think it's funny that when a centralized exchange fails people perceive it as bitcoin failing when using a centralized exchange goes against when Bitcoin is all about. Especially exchanges that require KYC/AML compliance.

bitcoin exchanges are a necessary evil that you have to use if you want to trade bitcoin, and until a better solution is found we are all stuck here using these centralized shit and lose money every time they decide to get hacked.

But I think you can avoid it, by storing the bitcoin you are trading. In the wallet is where you have full control to it. And do not ever save bitcoin, too long in wallet exchanger to avoid things like hacking and others.

Users should never store funds on an exchange platform for too long. This is not just true for the world of Bitcoin and digital currency, but also for any financial platform in existence. The main difference is how Bitcoin stimulates users to take control of their finances by keeping funds in self-controlled wallets, whereas fiat currency does not.

Bitcoin and another cryptos coins need exchanger without it, bitcoin is not valuable although there are manipulaton and scam on there but not all of exchangers. It is only one of all markets.

Bitcoin can exist without exchange platforms,altcoins can`t survive without them.

Altcoins can`t survive without bitcoin,the cryptocurrency commuinty is 95% about bitcoin and

5% about altcoins.

bitcoin wasn't created in 2008-2009 by satoshi to become a trading toy for people to buy and sell it to make profit. bitcoin was created to work as a p2p money so you can send money to anybody anywhere in the world without the need of banks and paying them a lot of money to do it.

so no bitcoin doesn't need exchanges.

That's right, without exchange bitcoin will very useless and where the people is wanna to exchange their bitcoin? but in my minds the pople is wanna using bticoin because the exchange become a guarantee from bitcoin for everyone.

Of course, It's not a good idea. Not only there is hacks and manipulations by the big Chinese exchanges but exchanges also defeats the whole purpose of using Bitcoin in the first place , as most people use Bitcoin because there is no need to provide their real information's , while exchange ask you for proof of ID , residence and stuff like that.

Be your own bank or assume the consequences . People start giving warnings about not to use exchanges and why you shouldn't store BTC there etc... but people simply don't understand so I think they should assume their actions.




They could trade using forums like Bitcointalk , It's just because they used to use exchange in the early days , that they can't stop now.
beside, there is Bitsquare.io for Peer to peer Decentralized exchange (I found the project just yesterday) which I think have a bright future.

Bitcoin without exchanges can't have this price and this popularity that has now, the exchanges make it easier for people to buy sell and trade bitcoin for any other currency.

no it is not a good idea to use exchanges but what is the alternative?
so as long as there is no other solution for trading bitcoin, the only course of action is to use exchanges but take some precautions. like not leaving your funds in their site as much as you can.

some say decentralized exchanges but i have not yet seen a popular project.

a Reputation/trust system (better designed than the current one on the forums should do the job) . It's probably impossible to stop every scam out there but It's better than having 70 million dollars lost in an exchange and shitload of people get affected by it (including those who don't have accounts in the exchange - as the price drops after hacks exchange) .

I don't think bitcoin would make it without exchanges and trading, I wouldn't be surprised if we lose 75% of Bitcoiners or more. It might not happen from one day to the next but for sure over time people will lose interest and move on. Features like anonymity and low fees are nice but what truly attracts people to Bitcoin is its money making potential.

Except not many people using Bitcoin, thats why you need exchanges. Imagine someone wanted to pay you with some altcoin you dont want to hold, so you need to exchange the altcoin to Bitcoin as well. The same way other people preffer their local currencies over Bitcoin, so exchanges are necessary for Bitcoin to be much more useable. Everyone is different and has its own prefferences, and thas why exchanges are used so people end up with what they want.

I think, it is very dibutukan to the growth of the bitcoin. because of trading we can understand market conditions and also understand the increase or decrease in prices. hack or manipulation that often occur in the bitcoin is one thing, to destroy the reputation of the bitcoin and they want to drop the bitcoin so that crypto they could take over the part that used to be in use by the bitcoin

maybe today bitcoin exchanger still needs to survive, but someday bitcoin does not require it. there are still many people who do not accept bitcoin, so before using bitcoin freely, maybe this time we need to trade in the exchanger. however, if the development of bitcoin is getting stronger, I guess it is not needed anymore

Of course we need exchanges. Without excganges people will have to trade between other people. And prices would be untraceable. We would also experience many mini-scams. Exchanges are preventing those mini-scams to happen. (Instead, They scam big though)

Bitcoin could hypothetically survive without exchanges, but it would lose a large, large portion of its value and a lot of the community would disappear. Exchanges and being able to change Bitcoin into USD means companies can accept Bitcoin and be able to still make money off of that fact; if that was no longer a thing then a lot of businesses would dip and the ability to buy with Bitcoin would be even more restricted.

bitcoin should be able to survive even without exchanges, the only difference in case no exchange was available was that price may have been lower and the changes wouldn't be this much.

Saying that all exchanges scam is just stupid.
It is not like this, of course it has happened many times already, but there are many trust-worthy exchanges too, like poloniex for example.
People get scammed on bitcoin, but they also get scammed in real life, by fake banks , fake exchanges etc.

IMO, bitcoin become this popular is because the trading. Most bitcoin user use bitcoin for trading to get profit.
If there's no exchanger, I think bitcoin wouldn't become this popular. And how can we convert bitcoin to fiat if there's no exchanger.

Not all bitcoin users here are using bitcoin for trading but im just one of using it for trading not for my rpiority. in my priority is to promote my blog using bitcoin because many sites right now are accepting bitcoin.. so its easy right now to use bitcoin.. and i hope more site are accepting bitcoin as payment,.

obviously yes both are always related and what happen to bitcoin without exchange people won't trade bitcoin and bitcoin will be useless also even though not all bitcoiners are traders exchange will be very necessary to convert bitcoin into particular currency

you are definitely right about it, exchanges give a possibility to people to get some easy bitcoins fast, it must exist in order for bitcoin to become big

Yeah bitcoin is need exchange effort to make bitcoin to use  that in real life because Its not that much usable in everywhere in my country.
I need more adoption in micro to big scale businesses with bitcoins then we can use it everywhere....

I also agreed, without exchange it would be like a disaster to all bitcoin users. Because with this things we can multiply or grow our bitcoins before we encash it to a real money it depends on the we belongs. So we need to patronize it as well.. :)